Avett Furniture Store Has Credit Sales of $400000 in 2016

question 131

Essay

Avett Furniture Store has credit sales of $400000 in 2016 and a debit balance of $600 in the Allowance for Doubtful Accounts at year end. As of December 31 2016 $130000 of accounts receivable remain uncollected. The credit manager prepared an aging schedule of accounts receivable and estimates that $7000 will prove to be uncollectible.
On March 4 2017 the credit manager authorizes a write-off of the $1200 balance owed by B. Fernitti.
Instructions
(a) Prepare the adjusting entry to record the estimated uncollectible accounts expense in 2016.
(b) Show the balance sheet presentation of accounts receivable on December 31 2016.
(c) On March 4 before the write-off assume the balance of Accounts Receivable account is $160000 and the balance of Allowance for Doubtful Accounts is a credit of $3000. Make the appropriate entry to record the write-off of the Ferntti account. Also show the balance sheet presentation of accounts receivable before and after the write-off.

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Definitions:

Systematic Desensitization

A therapy method used to reduce phobias and anxiety through gradual exposure to the feared object or situation alongside relaxation techniques.

Aversive Conditioning

A behavioral technique that involves associating an unpleasant stimulus with a specific behavior to reduce its occurrence.

Dialectical Behavior Therapy

a type of cognitive-behavioral therapy designed to help people change patterns of behavior that are not helpful, such as self-harm, suicidal ideation, and substance abuse.

Exposure Therapies

A set of psychotherapeutic techniques that involve confronting fears directly and in a controlled manner, often used to treat anxiety disorders.